Crop insurance yet to take root

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Despite the attempt to promote crop insurance, not even half of the rural as well as urban households are aware of such a scheme.

Only 35 per cent of the households are aware of cr­op insurance, as per the Irdai survey between 2010 and 2015. The percentage of households that are aw­a­re of crop insurance is higher in rural areas (39 per cent) against urban areas (32 per cent).

Of the 4 regions, the lev­el of awareness is highest in the west where 51 per cent of the households are aware of crop insurance. The level of awareness is higher among insured against uninsured households.

There are wide variations across states in terms awareness. In states like Hi­m­achal and Chhattisga­rh, 87.5 per cent of households are aware. But in Chandigarh, Assam, Megh­a­laya, Mizoram, and Pudu­cherry, less than 10 per cent of the households are aware about this insurance.

“Crop insurance in In­d­ia is still nascent and experimental in terms of pricing, coverage and claim settlement. Insurance firms have their own concerns and the availability of re-insurance too is not sufficient. Insurance covers farm owners and not tenant farmers and this is a structural defect of the insurance schemes.

“But insurance coverage is improving and in 2-3 ye­ars it will become more po­pular,” said R Cha­n­dras­ek­aran, secretary ge­n­e­ral, Ge­neral Insurance Council.

In case of cattle/livesto­ck insurance, at the all-Ind­ia level, only 29 per cent of ru­ral and 28 per cent of ur­ban households are aware. There is hardly any rural-urban difference in all the four regions about it. The level of awareness is somewhat better in the west, with 41 per cent of rural and 38 per cent of urban households reporting kno­w­ledge about it. The difference in the level of awaren­e­ss between the insured and the uninsured households is also not noticeable.

While in Himachal Pr­a­d­esh (81 per cent) and Ch­h­attisgarh (72 per cent) have high percentage of aw­areness, in Chandigarh, MP, Assam, Bihar, Jharkha­nd, Meghalaya, Mizoram, Sikkim, Tripura and Pudu­cherry, hardly any household has heard of this type of insurance. “Despite Ha­r­yana and Punjab being the agrarian sta­tes, penetration of crop ins­u­rance is very low,’ said Pushan Mahapatra, MD & CEO, SBI General Insurance.

Irdai has been trying to expand the channels, wh­i­ch sell crop insurance to increase its penetration in rural areas by allowing poi­nt-of-sales persons and co­m­mon service centres to sell sche­mes.

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